Vodafone Group Plc - MERGER UPDATE - BHARTI INFRATEL AND INDUS TOWERS
UPDATE ON THE MERGER OF BHARTI INFRATEL AND INDUS TOWERS
It is expected that Vodafone will be issued with 760 million new shares in the Combined Company at closing in exchange for its 42% shareholding in
At the current Bharti Infratel market valuation, Vodafone's stake in the Combined Company would have a value of approximately INR 151 billion (
The final number of shares issued to Vodafone and Providence, as well as the cash paid to Vodafone Idea, will be based on agreed closing adjustments, including but not limited to movements in net debt and working capital for Bharti Infratel and Indus Towers up to closing.
The parties have agreed a security package (the "Security Package") for the benefit of the Combined Company. The Security Package can be invoked in the event Vodafone Idea is unable to satisfy certain payment obligations under its Master Services Agreement with the Combined Company (the "MSA").
The Security Package is supported entirely by consideration from the transaction. The Security Package includes the following:
· a prepayment in cash of INR 24 billion (
· a primary pledge over shares owned by Vodafone in the Combined Company with a value of INR 40 billion (
· a secondary pledge over shares owned by Vodafone in the Combined Company (ranking behind Vodafone's existing lenders for the
The implementation of the Security Package is subject to consent from Vodafone's existing lenders in respect of the loan outlined above, regulatory approvals and on an extraordinary dividend of INR 48 billion (
The number of shares under the primary pledge will be determined at completion, based on the prevailing Bharti Infratel share price. The Security Package will reduce in value over time with payments made by Vodafone Idea under the MSA.
The transaction is conditional on consent from Vodafone's existing lenders and a grant of an extension by the
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